There’s been very little for investors cheer about in Prime Minister Stephen Harper’s first year on the job. High commodity prices, a solid stock market and a resilient economy may have given him a passing grade so far, but there are issues that can’t be ignored forever.

In the 12 months since he was elected, Harper has managed to deliver on some of his core election promises: cutting taxes, getting tougher on crime and trying to improve political accountability. But he’s also broken some: most notoriously, his pledge not to touch income trust taxation. Both the substance of the decision and the way it was sprung on the market without any warning stung many investors badly. His government has also bungled the environment file at a time when the problem of global warming has morphed from a marginal, special-interest issue into a fundamental economic predicament.

Moreover, despite making plenty of noise about addressing labour productivity, the data suggest that productivity continues to tumble, and not much has been done to improve it.

And it goes without saying that the financial services sector’s specific productivity issues — such as bank mergers, enhancing competition and creating a national securities regulator — have all gone untouched. Indeed, the new government has shown itself to be all but indifferent to the concerns of Bay Street.

There is something commendable in a politician who doesn’t simply kowtow to the whims of powerful polities. Whether you agree with the decision on income trusts or not, by reversing himself on the issue, Harper has shown an admirable willingness to put principle above political expediency. The government surely knew that the decision would cause a political firestorm; yet it went ahead without first leaking the news to its friends, ensuring that the pain in the market was widely shared.

It has also proven itself principled by refusing to bow at the feet of China’s emerging economic power — by criticizing its human rights record at a time when most governments are willing to sacrifice ethics on the altar of massive economic opportunity.

Now, Harper et al need to demonstrate the same sort of courage in making the structural reforms necessary to ensure the country’s future competitiveness, and to set it on a track to sustainable prosperity. Canada’s economic house may still have a pretty façade, but the foundation is cracking. It’s time to get to work.